jra6714ParticipantStatus: ResidentPosts: 1Joined: 08/21/2018
Hey everyone, I’m currently a 1st year ENT resident who’s been a long time reader of the blog and forum. I’ve finally started to implement my own financial plan and feel fairly confident based on everything I’ve read. However, I wanted to know if I could ask for some other opinions as well since having a fresh set of eyes would be beneficial.
Stage of life: 27 yo ENT intern
Social Situation: Currently engaged to a physical therapist. We’re planning our wedding now, but don’t have any specific time frame. Renting an apartment in the northeast, although not in any of the major cities
Annual Income: $52,170. My fiance currently works at a job in the NYC area with an income at roughly $90,000, but will be moving to be closer to me at a job with an income at roughly $65,000 a year.
Net worth: My own net worth currently based on my debts, savings, and other assets would most likely be -$200,000. My fiance’s would be roughly -$150,000 based on the same factors.
Tax Bracket: 22% for myself and 24% for my fiance, but she will likely be down to the 22% bracket with her new job
State of Residence: New York
Insurance Policies: My health insurance policy is a plan costing me $114.66 a month with an annual deductible of $500 for single payers and $1000 for family payers. I also have an own occupation disability insurance plan with Guardian/Berkshire Premier account for $5000 monthly with a future income rider of up to $20,000 a month. Currently do not have life insurance, but was debating getting a policy in place while I am still young and I don’t have any noted chronic medical conditions
Debts: My fiance currently has $160,329.28 in student loans with interest rates at 6.55% for $14,747.64, 6.16% for $32,118.69, 5.16% for $23,487.85, 5.96% for $23,406.46, 6.96% for $27,089.65, 6.59% for $18,012.70, and 5.59% for $21,466.29. All of these loans are Direct Stafford loans. She also has a car loan for $12,000 at 3%. Otherwise she has no credit card or other debts.
My current loans are student loans at a total balance of $223,126.11 with average interest rate of 5.46%.
$50,092.02 @ 5.06%
$53,148.02 @ 5.59%
$49,217.26 @ 5.59%
$52,627.06 @ 5.96%
$5,234.89 @ 3.15%
$5146.76 @ 3.15%
$4225.61 @ 4.25%
$2049.18 @ 5.35%
I own my car outright and have no credit card debt. My fiance has her loans serviced through Nelnet and I have mine through Fedloans. We are both in the REPAYE program.
Assets: I have a Roth IRA through Fidelity that I have been funding starting this past year. I am about to contribute the maximum $5,500 to it and have the entirety of it invested in the Fidelity Freedom Index 2060 Investor target date fund with an expense ratio of 0.14. I also have a 403b with my employer that I contribute 3.5% of my salary to with an employer contribution of 8% of my gross salary. That will be vested after one year of employment and I have the account invested in Fidelity’s US stock Index Fund and Fidelity’s Bond Index fund at 90% and 10% respectively.
My fiance currently has an investment account at her job, but I am not sure of what her brokerage is through or what her investments are. We were going to reevaluate them once she moves to her new job.
We also each have roughly $12-14k in our respective bank accounts as emergency funds.
1) My general thought has been the philosophy of the blog to save roughly 20% of my paychecks and contribute that to either my loans or investments with the goal of maxing out the Roth IRA right now. If this were the case, then I have been saving $576 a month with roughly $460 going to the Roth. The other $110 has been going as a part of my minimum payment for my student loan at $238 a month. I have been researching other accounts and was wondering if I should be investing that difference in an HSA instead or even putting that money into something that will fund for our future house after residency? My current plan does not qualify as a HDHP, so if I should be investing in a HSA, what steps should I be taking?
2) Should I get a life insurance policy in place as well? We still have some time before our wedding or having children so nobody is directly in need of my income should anything occur, but like I said above, I thought about getting a policy in place while I’m young and healthy instead of later to save money. I’ve visited term4sale.com, but wasn’t sure if it would be a waste of money to purchase right now.
3) In terms of the funds I’ve invested in, I’ve tried to make sure I’m investing in index funds and the target date funds were recommended to me as a very good fund to invest in that will be passive and allow me to achieve my goals of being financially independent in a reasonable amount of time without having to stress out about changing my plan. In everyone’s opinion, is this a good fund to invest in for my accounts now and in the future or are there better recommendations?
4) Finally, in regards to our student loans, my plan has been to stay on the REPAYE plan for both myself and my fiance at least during residency due to the interest subsidy benefit. I would then either continue with REPAYE and attempt to apply for PSLF since residency and a potential fellowship will be a maximum of 6-7 years, or refinance our loans after residency and use a large portion of my salary as an attending to eliminate both of our loans in 2 or 3 years. Does this sound like an efficient way to eliminate our debt or would others recommend something different? I also was unsure if there were more benefits of us consolidating our respective loans versus leaving them as they are? I’ve attempted to calculate the monthly interest for myself in the past and it appears to be roughly the same for what I would current pay but am not sure if I’ve calculated this correctly.
If anyone would be able to help me with these questions, I would greatly appreciate it. My goal for our plan is to establish a solid base for our finances now to allow us to concentrate on my residency and my fiance’s career respectively, instead of constantly worrying about if we’re messing up our finances.
Thank you again to anyone for any help they could provide and hope you have a great day.February 10, 2019 at 7:13 am MST #189631abdsParticipantStatus: PhysicianPosts: 153Joined: 01/16/2017
1. It doesn’t appear you can have an HSA. You could consider putting more in your 403b, or keep paying extra on your student loans.
2. I wouldn’t get life insurance until you have kids. Your current loans would be forgiven if you die.
3. Your choices are fine. There are very different thoughts on how to invest across funds, but as long as you’re using relatively low-expense options I don’t think anyone will fault you.February 10, 2019 at 8:27 am MST #189650